GST Vouchers' Offset of GST Paid by Lower Income Households

Parliamentary Question by Chua Kheng Wee Louis:

To ask the Deputy Prime Minister and Minister for Finance (a) over the last three years, what average percentage of GST paid by the lowest 20% of households (by income) is offset by all forms of GST Vouchers; and (b) what is the breakdown based on one-off versus permanent GST Voucher schemes.

Parliamentary Reply by Second Minister for Finance, Mr Lawrence Wong:

Singapore operates a comprehensive and progressive system of taxes and transfers to support our citizens in meeting their needs, including housing, education, healthcare, public transport, and a safe and secure environment. 

The GST Voucher (GSTV) is one permanent scheme that provides support to lower- and middle-income households and seniors for their living expenses.  It comprises an annual cash payout, annual MediSave top-up for those aged 65 and above, and quarterly utilities rebates (U-Save) for HDB households. 

In some years, there were additional one-off GSTV special payments. This was the case in the past 3 years. In 2019, a GSTV – Cash special payment was given to celebrate Singapore’s bicentennial and to support Singaporeans who need more help.  An additional $20 of U-Save rebates is also provided each year from 2019 to 2021, to mitigate the impact of the introduction of the carbon tax. In 2020, additional U-Save rebates were given to all eligible HDB households, to help Singaporeans cope during the extraordinary uncertainty brought about suddenly by COVID-19.

From 2018 to 2020, the permanent GSTV scheme offset an average of 84% of the annual GST payable by the bottom 20% of Singaporean households, on a per household member basis.  

The GSTV special payments in 2019 and 2020 were equivalent to an offset of 33% of the GST payable by the bottom 20% of Singaporean households, on a per household member basis. This was on top of the 84% offset under the permanent GSTV scheme.  In other words, in this extraordinary year, households in the bottom 20% got more from the permanent and one-off GST Vouchers than the amount of GST payable.

An enhanced GSTV scheme will continue to be part of our progressive system of taxes and transfers, ensuring that lower-income households receive more benefits than the taxes they pay.